Wells Fargo

(WFC) - Get Report

shares dropped as much as 6% on Friday as some analysts became disappointed that the big bank did not raise more capital in its recent offering.

Late Thursday, the San Francisco-based company priced an $11 billion offering of 407.5 million shares of common stock at $27 a share to the public. The price was nearly 15% lower than its closing price on Wednesday, the day the offering was announced. The offering is expected to close next Thursday.

Wells Fargo has said that the common stock offering is to support its soon-to-be completed purchase of ailing lender

Wachovia

(WB) - Get Report

. Wells agreed to purchase the Charlotte, N.C.-based company last month for $15 billion, after a bitter battle with

Citigroup

(C) - Get Report

. At the time it said it planned to raise as much as $20 billion. But Wells received $25 billion from the federal government in the first round of preferred equity investments in the nation's banks through the Troubled Asset Relief Program, or TARP.

But at least one analyst says it is likely that Wells will have to come back to the markets for more capital.

"

We were looking for more," writes Paul Miller, an analyst at FBR Capital Markets. "Based on this low level, we expect that Wells Fargo will have to return to the market and raise additional capital at more dilutive levels."

Miller, in a note Friday, estimates that Wells Fargo's tangible common equity to assets ratio is at a "low level" of just 3.3%.

Tangible common equity does not include goodwill and other intangible items. Many analysts say that tangible common equity is a more accurate measure of capital as opposed to the Tier-1 ratio that regulators use.

"We consider 3.3% tangible equity to assets a level of considerable leverage, particularly when faced with deteriorating credit quality, merger integration risk, economic weakness, and increased regulatory scrutiny," Miller writes. "Given tangible equity of just $44 billion (including the capital raise), Wells Fargo has very little wiggle room if losses are greater than expected."

During a conference call with investors Wednesday, Wells Fargo management reiterated that they expect $60 billion of cumulative losses from Wachovia's loan portfolio. The bank plans to record about $39.2 million of those losses, or two-thirds of the total, at the close of the deal, which is expected by the end of the year.

Andrew Marquardt, an analyst at Fox-Pitt, Kelton Cochran Caronia Waller, believes that Wells Fargo's capital levels "will be sufficient to help navigate through the current tough credit environment and deal with projected losses on the Pick-a-Pay loan portfolio," he writes in a note Friday.

Though he acknowledges though that Wells Fargo's tangible common capital "still looks weak," he said in the note.

Marquardt estimates that Wells' tangible common equity will rise to 2.81% by the end of 2009 and to 4.01% by the end of 2011, compared to Tier-1 capital ratio of 9.24% and 10.27% in the same respective time periods.

"We think capital will build relatively quickly given Wells Fargo's core earnings power and likely conservative estimates of deal-related cost saves," the Fox-Pitt analyst writes, also citing revenue synergies that have not been factored in yet.

Keefe, Bruyette & Woods analyst Fred Cannon is also concerned of Wells Fargo's capital levels, but Cannon agrees that tangible equity will improve over time.

"

Wells Fargo will go from having one of the highest tangible common ratios among large banks prior to the merger at 5.6%, to one of the lowest" save Citigroup, Cannon writes in a note. He estimates the bank's tangible common equity to assets ratio to be 2.41%, while Citi's is 2.1%.

"Thus the risk profile of Wells Fargo has increased," Cannon writes. "However, as we have noted, now as part of the Trillion Dollar Club of large banks, Wells Fargo falls into the 'too big to fail' category, in our opinion. Further the higher amount of leverage that common shareholders will take on will create higher returns in the future."

According to Cannon, the bank's tangible equity will improve from the acquisition of Wachovia in three ways: reduced credit marks over time since Wells will take marks on Wachovia's troubled loan portfolio at the time the deal closes. The credit marks will also "enhance the yields" on the marked portfolios until the credit losses actually occur, he writes.

Additionally, cost saves and synergies from the merger will create "arguably the strongest national commercial bank in the U.S.," he writes.